\u3000\u3 Guocheng Mining Co.Ltd(000688) 733 Anhui Estone Materials Technology Co.Ltd(688733) )
Event:
Anhui Estone Materials Technology Co.Ltd(688733) released the performance express of 2021. The company achieved a revenue of 423 million yuan in 2021, a year-on-year increase of + 119.85%; The net profit attributable to the parent company was 108 million yuan, an increase of + 139.98% at the same time; The net profit deducted from non parent company was 97 million yuan, an increase of + 214.51% at the same time. Among them, Q4 achieved a revenue of 147 million yuan, a month on month increase of + 31.25%; The net profit attributable to the parent company was 43 million yuan, a month on month increase of + 95.45%. The company’s performance in 2021 exceeded expectations.
Key investment points:
Lithium battery demand continued to be strong, and boehmite sales rose sharply. The company’s boehmite export volume ranks first in China. It will be supplied in large quantities in 2021. The shipment volume in the first three quarters is about 1 Shenzhen Properties & Resources Development (Group) Ltd(000011) 000 tons, and the shipment volume in the third quarter is about 434400 tons. The gross profit margin of boehmite is higher than that of electronic materials and flame retardant materials, and the sales growth improves the profitability of the company. In the first three quarters of 2021, the company’s battery material revenue was 215 million yuan, an increase of 167.94% at the same time, accounting for 78.00%. The permeability of boehmite will continue to rise in the future, and energy storage may become the next demand market due to safety requirements.
Spherical alumina was successfully introduced into pack, and the business of electronic materials increased significantly. Because of its high thermal conductivity, spherical alumina can be filled in thermal conductive adhesive and used in the combination part of pack cell and plastic to achieve heat dissipation effect. In 2021, the sales volume of spherical alumina increased rapidly to drive the significant growth of electronic materials business. It is expected that Huaiyuan production base will be put into operation in 2022, and the production capacity of spherical alumina will become a new growth point of the company’s revenue.
Release the scale effect, reduce costs and increase efficiency, and increase the gross profit margin. In 2021, the demand of lithium battery customers increased, the company accelerated the expansion of production, the increase of output led to the scale effect of the company, and the improvement of the automation level of the company’s production line led to the cost reduction and efficiency increase of production and manufacturing links. During the period, the expense rate decreased from 18.40% in 2020 to 16.40% in the first three quarters of 2021, and the gross profit margin increased from 37.32% in 2020 to 43.32% in the first three quarters of 2021, improving the profitability of the company.
Profit forecast and investment rating: the demand for new energy vehicles is rising, the permeability of boehmite is improving, and the company’s capacity expansion is expected to drive the improvement of performance. Spherical alumina has been successfully introduced into pack, and the future production capacity will fall to the ground or become a new growth point of the company’s performance. Therefore, in our coverage for the first time, it is estimated that the company’s operating revenue from 2022 to 2023 will be 905 million and 1.328 billion yuan, and the net profit attributable to the parent company will be 239 million and 357 million yuan. The current stock price corresponds to 51.9x and 34.8x PE, which is rated as “buy”.
Risk tips: capacity expansion is less than expected, the impact of raw material price fluctuations, lithium battery demand is less than expected, there is a great risk of dependence on Contemporary Amperex Technology Co.Limited(300750) and the expansion of electronic communication customers is less than expected
